Reliance Communications has always been forefront offering cheap rates, be it bundled phones or voice / internet tariffs. In yet another announcement, Reliance plans to have largest roll-out of affordable wireless internet service in over 24000 towns and 600,000 villages. This affordable wireless internet would be offered on Reliance Net-Connect USB sticks.
What really took me by surprise was – the pricing. Reliance has slashed the rates of the Net Connect USB stick to Rs. 1099/-. Now, most of you may be knowing that same Net Connect USB stick used to cost roughly about 3k to 4k earlier.
Whats more, the affordable plans will come without any usage restrictions (essentially it will offer unlimited Internet) and will cost Rs. 169 per month. With such low costs of both hardware & software, the barrier to entry has reduced to very large extent.
But, there is a catch to it, not one but two – The Unlimited internet will offer a speed of 153 kbps, which according to today’s standard is quite low. You really cant to much except email and light browsing. Additionally, it will not be available in Top 1000 towns & cities in the country. If you are reading this, there are 99% chances that it will not be available in your city / town.
Even then, this is a phenomenal proposition. It will bring wireless internet connectivity to the length and breadth of the India.
The surprise to me really was the USB stick price of Rs. 1099/-. But if you think a little deeper, it will be clear to you as to why and how Reliance can afford it. First of all, with advent of 3G in the cities, Netconnect USB will be out of favour in the cities and Metros. Secondly, most of the users are swapping these USB sticks for newer 3G services. For Reliance, it is also a great channel to get rid of any stock that may be available with them (this I am guessing).
And then there is another thought – If Reliance could afford selling these at thousand bucks a pop, why did they charge as high as Rs. 5000 just couple of years back? Did Reliance offer because urban users could afford to pay it ?
My guess is as good as yours. What do you think ?